Enterprise Investors acquires Macon Deva, a leading construction materials producer

Established in 1963, Macon Deva is one of the largest producers of building materials in Romania. The company was privatized in 1994 through a management and employee buyout (MEBO) and became a 100% private joint stock company.
After privatization, the majority of profits were reinvested in new production facilities and in increasing the product quality.

Macon offers a wide range of products including autoclaved aerated concrete (AAC), prefabricated concrete elements, concrete poles, structural construction elements for industrial and civil buildings, elements for bridges and roads, insulating materials (mineral wool), roof tiles, etc.

During the last few years, Macon has enjoyed steady growth, reaching a very strong market position in Transylvania and enjoying good recognition and results in other areas of the country. The company achieved revenues in 2005 of €23 million, and sales in the first six months of 2006 totaled €11 million, 32% higher than the same period of 2005. Macon’s business objectives include expanding its product distribution in adjacent regions.

Romania’s construction business is one of the fastest growing economic sectors in the country, with 20% growth in 2005 and heavy investment bringing 2006 growth up to an estimated 35%. In 2005, construction works totaled approx. €7.4 billion.
Due to the lack of highways and quality roads, Romania plans to invest an extra €18 billion by 2010 in modernizing the transport infrastructure. With a forecasted growth within the next four years of approx. 11% annually, the construction sector in Romania continues to attract heavy investment.

“We intend to combine Macon’s good market position and high growth prospects with Enterprise Investors’ unique expertise in building company value, corporate governance and management. We believe that this winning combination will help us create the market leader in construction materials. The upcoming EU accession will have a positive impact on the Romanian construction market, which we estimate will become the most dynamic in the EU,” commented Cristian Nacu,
vice president at Enterprise Investors.

Enterprise Investors has been active since 1990 and is the largest private equity firm in Central and Eastern Europe. The firm manages funds totaling €1.6 billion. To date, private equity funds managed by EI have invested €0.9 billion in 102 companies, exited 85 investments and returned over €1.1 billion to their investors. The investment in Macon is the fourth investment of Enterprise Investors in Romania, after the firm’s acquisition of stakes in Artima, a supermarket chain in Transylvania, Siveco Romania, a leading software company, and Orange Romania (sold in 2005 to France Télécom). The Macon transaction brings the total invested by EI in Romania to almost €80 million.

EI has been advised during the Macon Deva transaction by Ernst & Young, RTPR and NNDKP law firms, while the sellers benefited from the support of Capitalinvest and M. Harsan Law Office.